What I’ve Learned About Being A CEO

Today’s guest blogger is Charles D. Morgan, former CEO of Little-Rock-based Acxiom Corporation, world leader in data gathering and its accompany technology. Today he leads a new tech startup called PrivacyStar. His memoir, Matters of Life and Data: The Remarkable Journey of a Big Data Visionary Whose Work Impacted Millions (Including You).

I’ve been a CEO for nearly 40 years, and whenever anyone asks me what’s the most important thing I’ve learned about building successful companies, I answer with two words: corporate culture.

Leadership is about what you do, not what you say, and a healthy corporate culture is evidence of a CEO’s leadership. Some of that evidence is physical, such as daycare centers and basketball courts and exercise rooms, three facets of the culture we created at Acxiom Corporation that contributed to our being named one of America’s “best places to work” by both Working Woman and Fortune magazines.

But while those physical amenities are nice to have, I believe it’s the more abstract parts of a corporate culture that ultimately matter most. In the late 1980s, Acxiom was growing so fast that we lost our way. We were adding so many people, and building up so many layers of management, that we were having trouble getting things done. By the time we woke up, we had 13 layers of management in a company of 400 employees.

We slashed the management structure down to three layers, eliminated corporate titles—mine became simply “Company Leader”—and got leaner and looser and quicker on our feet. By cutting all those layers of supervision we created a culture of engagement in which our “associates,” as we called our employees, were encouraged to think freely, to make mistakes, and to be as creative as possible. We actually institutionalized a philosophy stressing leadership at every level. “You manage projects, and you lead people,” became our mantra, “but you don’t manage people.” To my mind, there’s no faster way to kill creativity than over-supervision.

Our people responded exactly as I hoped they would—they stopped checking their brains at the door and started enjoying the challenges that came their way. By the end of the 1990s, Acxiom was a fully international company with 5,000 employees and $1 billion in annual revenue. I have no doubt that our success was due to our people’s new sense of freedom—of being respected, trusted, and expected to strive for excellence.

Recently I traveled to Silicon Valley, where the subject of corporate culture came up in several meetings—often in a negative context. At one tech company boasting every luxury that so often characterizes top tech firms today, the executive I met with appeared to resent his pampered young employees. Between the lines, he seemed to be saying, I hate that I have to give these spoiled people all these entitlements, but that’s what it takes to hire and keep them. To me, that seems like a self-fulfilling prophecy.

In contrast, I also met with executives at Hewlett Packard, and they couldn’t stop talking about how Chairman and CEO Meg Whitman had “blown up” the stuffy old HP culture. They showed me the telecommunications room, a space much smaller than a typical boardroom. “This is where Meg spends most of her time,” one executive said. “She sits in here and talks with HP employees all over the world.” Now that’s how to make high-tech really work for you.

Meg Whitman’s telecommunicating reminded me of Sam Walton, whom I got to know in my early days at IBM; in fact, I made the presentation that resulted in his buying Walmart’s first computers. Even in those relatively low-tech times, Sam showed his leadership by creating a culture of interaction that became part of the DNA of his company. He would climb into his twin-engine piston airplane and fly himself from town to town visiting his growing chain of stores, walking the aisles and listening to his people. It didn’t take long for his managers to get the message, and soon Walmart had a fleet of 20-or-so planes. Every Monday morning at 7 a.m., the little Bentonville, Arkansas, airport sounded like the U.S. Air Force was getting ready to take to the skies.

To me, the lesson is crystal clear: Empowerment always trumps entitlement, and the very best CEOs work to create a healthy corporate culture of engagement with, and self respect among, their employees. That’s the kind of culture that positions a company for success.

To learn more about Charles Morgan and the use of data in today’s business world, join us for our Soundview Live webinar: The Remarkable Story of a Big Data Visionary.

Modern Day Gold Rush

The discovery of gold nuggets in the Sacramento Valley in early 1848 sparked the Gold Rush, arguably one of the most significant events to shape American history during the first half of the 19th century. As news spread of the discovery, thousands of prospective gold miners traveled by sea or over land to San Francisco and the surrounding area; by the end of 1849, the non-native population of the California territory was some 100,000 (compared with the pre-1848 figure of less than 1,000). A total of $2 billion worth of precious metal was extracted from the area during the Gold Rush, which peaked in 1852.

To accommodate the needs of the ’49ers, gold mining towns had sprung up all over the region, complete with shops, saloons, brothels and other businesses seeking to make their own Gold Rush fortune. The overcrowded chaos of the mining camps and towns grew ever more lawless, including rampant banditry, gambling, prostitution and violence. San Francisco, for its part, developed a bustling economy and became the central metropolis of the new frontier.

Fast forward to the 21st Century and a new gold rush is taking place. As Charles Morgan, author of Matters of Life and Data, puts it: “Data mining is the new gold rush, and we were there at first strike, dragging with us all our human frailties and foibles. In this book’s cast of characters you’ll find ambition, arrogance, jealousy, pride, fear, recklessness, anger, lust, viciousness, greed, revenge, betrayal, and then some.”

Morgan, the Founder, Chairman & CEO of Acxiom Corporation (NASDAQ: ACXM), world leader in data gathering and its accompanying technology, grew Acxiom from an early-stage company to an international corporation growing to $1.4 billion in annual revenue during his tenure as CEO from 1972 to 2008.

If you’d like to hear the inside story of this 21st century gold rush from one of the key players, join us on June 30th for our Soundview Live webinar with Charles Morgan titled The Remarkable Story of a Big Data Visionary. You’ll get the inside scoop of the good and bad players in the data industry, as well as learning about how this data gold rush is affecting our business and personal life.

 

The Revolution Transforming Decision Making, Consumer Behavior and Almost Everything Else

dataism

In a January 2015 New York Times Review of Books essay, critic and magazine editor Leon Wieseltier warned against a post-humanist — after the human — culture in which technological devices and data replace human beings and thought. “Quantification is the most overwhelming influence upon the contemporary American understanding of, well, everything,” he writes. “It is enabled by the idolatry of data, which has itself been enabled by the almost unimaginable data- generating capabilities of the new technology.”

In short, “Where wisdom once was, quantification will now be.” One might assume that Wieseltier does not have a copy of Data-ism, a new book from New York Times technology journalist Steve Lohr, on his bedside table. At first glance, Data-ism seems to be the embodiment of Wieseltier’s fear that quantification has replaced wisdom. The “ism” title seems to promise an introduction (manifesto?) to the philosophy of quantification. The subtitle is not timid: “The revolution transforming decision making, consumer behavior and almost everything else.” And within its pages, Lohr does a masterful job of describing all of the possibilities of “big data.”

Data-ism is perhaps one of the most balanced, levelheaded examinations of the potential of big data. Lohr never hesitates to give voice to the critics or skeptics of a data-driven world, nor fails to point out the limitations of artificial intelligence. It is this balance and restraint, however, that makes Lohr and his book the most persuasive champions of the massive and generally positive changes that “the virtuous cycle of more and more varied data and smarter and smarter algorithms, written by human programmers” will make in our lives. In short, quantification will not replace wisdom, as Wieseltier fears; but, Lohr shows, it will augment our wisdom — working with our amazing human brains — to help us make better decisions, free our time and energy to focus on the tasks where we can make the most difference, and, ultimately, make the world a much better place.

 

The Revolution That’s Transforming Everything

“By one estimate, 90 percent of all of the data in history was created in the last two years. In 2014, International Data Corporation calculated the data universe at 4.4 zettabytes, or 4.4 trillion gigabytes. That much information, in volume, could fill enough slender iPad Air tablets to create a stack two-thirds of the way to the moon. Now, that’s big data.”  Steve Lohr

Steve Lohr has covered technology, business, and economics for the New York Times for more than twenty years and writes for the Times’ Bits blog. In 2013 he was part of the team awarded the Pulitzer Prize for Explanatory Reporting. He was a foreign correspondent for a decade and served as an editor, and has written for national publications such as the New York Times Magazine, the Atlantic, and the Washington Monthly. He is the author of Go To: The Story of the Math Majors, Bridge Players, Engineers, Chess Wizards, Maverick Scientists, and Iconoclasts—the Programmers Who Created the Software Revolution. He lives in New York City.

In his book Data-ism, Lohr makes several claims about the explosion of data:

  • That Big Data is the next phase, in which vast, Internet-scale data sets are used for discovery and prediction in virtually every field.
  • That this new revolution will change the way decisions are made.
  • That relying more on data and analysis, and less on intuition and experience, can transform the nature of leadership and management.

In our upcoming Soundview Live webinar, The Revolution That’s Transforming Everything, Steve Lohr explains how individuals and institutions will need to exploit, protect, and manage their data to stay competitive in the coming years. Filled with rich examples and anecdotes of the various ways in which the rise of Big Data is affecting everyday life, it raises provocative questions about policy and practice that have wide implications for all of our lives.

Join us on April 16th to learn how big data affects your business decision making, and post your questions for Steve during the webinar.

How to Use Big Data to Win Customers, Beat Competitors, and Boost Profits

TAKING ADVANTAGE OF BIG DATA

When used car dealer Les Kelley launched the Kelley Blue Book, his target customers were used car dealers (and insurance companies and banks that made car loans). Dealers could consult the book and, based on the information it contained, have an idea of what price tag to put on their merchandise. Today, the target customers for the Kelley Blue Book, now free online, are used car buyers who consult it to have an idea of what they should pay for the used car they are buying.

The customer flip for Kelley’s Blue Book exemplifies the switch in power in the purchasing process from seller to buyer. Buyers are no longer dependent on sellers to give them the information they need to make a purchasing decision. So in this new purchasing paradigm, are sellers completely powerless?

The answer is no, and the reason, in large part, is what is commonly known as “big data.” As explained in The Big Data-Driven Business by LinkedIn marketing executives Russell Glass and Sean Callahan, in today’s world, buyers don’t have to go to sellers in order to find the information they need to make the right decisions. Instead, they can use a variety of digital search channels to gather any information they need and then approach the sellers.

However, write Glass and Callahan, the same digital capability that allows buyers to take the initiative allows sellers to follow what the buyers are doing. They track the websites and pages within those sites that buyers or potential buyers are visiting. They also track purchasing trends, which merchandise is popular at a given time, which items lead to the purchase of other items and a whole host of other customer-related data — so much data, in fact, that we now refer to all of this information as “big data.”

Such extensive tracking takes some sophisticated software, of course. This software, write Glass and Callahan, is what is known as the “marketing stack.”

The marketing stack includes marketing automation software, business intelligence databases, CRM systems, content management systems (which allow marketers to take over updating digital marketing content with minimal IT involvement), blogging and data management platforms, analytics tools, social media management platforms, search engine platforms, and other systems and software that, in essence, enable marketers to manage the accumulation and analysis of big data.

Principles for the Data-Driven Company

It may seem, from the litany of technological systems just cited, that establishing a big data-driven company is complex and expensive. It can indeed be complex. The chief marketing officer and the chief information officer must work closely together if a company is going to have any success at using big data. Some companies have started hiring “chief marketing technologists” solely responsible for the technology side of marketing. The bottom line is that all marketing professionals today must be at least knowledgeable about the technological components of the marketing function.

Using big data does not have to be expensive, however. In one of the most insightful chapters, Glass and Callahan offer 11 principles for successfully making a business more data-driven. Among the principles are, determine what you want to know about your customers and prospects; start small; don’t bet everything on technology (figure out first what you need, not what technology you want to use); and hire the right people — forget the art schools, and think about Star Trek conventions instead.

Glass, who heads B2B marketing at LinkedIn, and Callahan, LinkedIn’s senior manager for content marketing, present a guide for marketers in companies of all sizes.

Work, Progress, and Prosperity in a Time of Brilliant Technologies

THE SECOND MACHINE AGE A New Era Going Full Steam

For most of us, the Industrial Age refers to the late 19th-century explosion of large companies with large factories that fundamentally changed the way we live and work. Yet, as authors Erik Brynjolfsson and Andrew McAfee explain in the opening pages of The Second Machine Age, their brilliant study of digital technologies, the Industrial Age was actually launched in 1775 — an era that for most Americans evokes colonial leaders with white wigs and tri-corned hats, not dirty factories belching dark smoke into the skies and thousands of smudge-faced children working dawn to dusk. What happened in 1775, of course, was James Watt’s invention (or, more accurately, the refinement) of the steam engine. The full impact of Watt’s steam engine on our society would not be felt until much later.

For the authors, humanity has reached a similar “inflection point” for the computer age. Companies have been buying computers for more than 50 years. Time declared the personal computer the “Machine of the Year” in 1982. But it is now, in the second decade of the 21st century, that “The full force of these technologies has recently been achieved,” the authors explain. “By ‘full force,’ we mean simply that the key building blocks are already in place for digital technologies to be as important and transformational to society and the economy as the steam engine.”

What Computers Can Do and Can’t Do

In a wide-ranging discussion of the joys and challenges of this “second machine age” — when, in the words of the authors, “computers and other digital advances are doing for mental power… what the steam engine and its descendants did for muscle power” — the authors give numerous examples of the opportunities created by digitization.

A GPS-based app called Waze is one example. A standard GPS will give you the standard route to your office based on its downloaded maps. However, Waze sends back to the company’s servers information transmitted by sensors on the smart phones of its members already on the road; this information can then relay to the person about to leave for work that, for example, an accident has closed down the main road on his usual route. Waze is one illustration of how technological capabilities only now available can truly make life better.

At the same time, the authors dismiss the notion that computers will be ruling the world. In an eloquent chapter called “Learning to Race With Machines,” the authors argue that ideation is out of the reach of computers. “Scientists come up with new hypotheses,” the authors write. “Chefs add a new dish to the menu. Engineers on a factory floor figure out why a machine is no longer working properly. Steve Jobs and his colleagues at Apple figure out what kind of tablet computer we actually want. Many of these activities are supported and accelerated by computers, but none are driven by them.”

The Good and the Bad

The Second Machine Age is a celebration of the “bounty” that the exponential digitization capacity offers. However, Brynjolfsson and McAfee are also not afraid to point out the potential downsides to digitization, notably what the authors term “spread,” which is the “ever-bigger differences among people in economic success — in wealth, income, mobility and other important measures.”

But the Industrial Revolution also brought serious, unacceptable consequences — widespread pollution and the scourge of child labor, to name just two, that a combination of democratic government and technological progress were able to overcome. The authors are convinced that the same combination of technology and the right policies can effectuate a similar result: a better life for all of us.

How to Create Strong Relationships with Consumers

Romancing the Brand. It sounds like the sequel to Romancing the Stone, the movie. But actually it’s a new book by author Tim Halloran. Here is how he begins the book.

“It wasn’t a particularly dramatic moment. The eight women sat around the overflowing table of colored cans and bottles of soft drinks. They has just completed what we call a ‘sorting’ exercise, in which participants arranged soft drink brands in groups based on some organizing principle that they were to develop themselves. I don’t remember how they organized the forty-plus brands that day, but what happened next stuck with me. A petite woman in her late twenties, picked up one of the cans and said to the focus group moderator, ‘I drink eight of these a day. It is always with me, no matter what happens. I was there when my boss gave me my promotion last week. It was at my side two months ago when my cat died. It got me through it. I start and end my day with it. It’s never let me down. I can always count on it. To sum it up, it’s my boyfriend . . . Diet Coke.’”

Wouldn’t we all like to have this kind of loyalty from our customers? They are engaging in a rich, complex, ever-changing relationship, and they’ll stay loyal, resisting marketing gimmicks from competitors and influencing others to try the brand they love.

Halloran reveals what it takes to make consumers fall in love with your brand. Drawing on exclusive, in-depth interviews with managers of some of the world’s most iconic brands, he arms you with an arsenal of classic and emerging marketing tools—such as benefit laddering and word-of-mouth marketing—that make best-in-class brands so successful.

We’ve invited Tim Halloran to join us on April 30th to reveal to us How to Create Strong Relationships with Consumers. This Soundview Live webinar with give you the chance to learn first-hand about these emerging marketing tools, and to ask your most challenging questions. Join us for the sequel and bring your popcorn.

Know Your Talent Better Than You Know Your Customers

THE DECODED COMPANY

Using Big Data in Human Resources

What if companies knew as much about their employees as they knew about their customers? That is the provocative question at the heart of The Decoded Company — a book written by a group of entrepreneurs connected to a technology-driven health care marketing agency called Klick Health. Klick Health CEO Leerom Segal and his co-authors are great believers in the potential of big data — the myriad of information that is quietly and continuously collected from you as you go about your business as a consumer. Surprisingly, while companies have near-unanimously embraced the use of big data technology for their customers, very few attempt to find out more about their employees.

Three Principles

Using their own experiences as leaders of a fast-growing technology company, the authors describe in their book three fundamental principles for decoding your organization — that is, truly understanding in real time the individual skills, motivations and successes of employees, recognizing the challenges they face, and supporting each individual or groups of individuals as needed.

  • Principle 1: Technology as a Coach and a Trainer. According to the authors, most organizations use technology as a referee rather than as a coach. Technology allows companies to monitor what employees are doing and to whistle the fouls when they fall behind or fail. In decoded companies, technology is a      trainer and coach — preparing employees for the game (to continue the metaphor), then watching from the sidelines and jumping in to coach as      needed. One coaching idea proposed by the authors is the hiring of a “concierge” — someone who might use some of the traditional HR tools, such as career counseling or performance reviews, but whose one and only goal is to design a customized solution for each employee that helps them perform and grow. Technology as a trainer, the authors explain, means using “data and systems to watch blind spots, identify teachable moments, and proactively intervene with just-in-time training.”

 

  • Principle 2: Informed Intuition. The second principle is that technology does not replace but rather augments the intuition of leaders born from their      experience and knowledge, thus allowing them to make better decisions. The      capture of ambient data — ongoing information about what employees are doing or saying — is vital. (One example of the creation of ambient data is your Facebook activity. Facebook tracks with whom you communicate on their site, how often, from where and through which method, such as posting or chat message. This ambient data determines which Facebook friends end up on your newsfeed.) After analyzing a combination of ambient data and selected self-reported data, such as performance self-evaluations or monthly results, managers in decoded companies use their intuition to seek solutions to employee challenges. Bank of America discovered that the performance of call-center employees improved based on whom they talked to  during overlapping lunches. The bank thus decided to create more opportunities for employee conversations by changing a policy that had restricted overlapping breaks.

 

  • Principle 3: Engineered Ecosystems. The third principle is to use data to set up the culture and the environment that enables employees to work at their highest levels. Engineered ecosystems are both data-driven and talent-centric. For example, the authors describe how Google — which, as the company that tested 41 shades of blue for one of its toolbars, is notoriously data-driven — launched a major initiative to identify the most important traits for its managers. The results seemed at first less than earth-shattering: The eight identified traits included not micromanaging, expressing interest in employees’ success, having a vision and a strategy, and having the technical skills to advise the team. The data, however, not only identified the traits but also ranked their importance, and this is where Google’s leaders uncovered a truth about its culture that was contrary to everything they believed: technical expertise, once thought to be the keystone of a great Google manager, is the least important trait that a manager can have. Everything else comes first.

While Segal and his co-authors use Google and numerous other companies in a variety of industries as examples, it is their own success at Klick Healthcare that make The Decoded Company an authoritative, balanced and real-world exploration of the human resources potential of big data.

Jeff Bezos and the Age of Amazon

THE EVERYTHING STORE

Jeff Bezos’ Dream Come True

While the face may be somewhat familiar and everyone knows his company well, Amazon founder Jeff Bezos has not enjoyed the iconic status of a Bill Gates or the ubiquitous (at least in business literature) Steve Jobs. And yet the Amazon story, as told in a new book from Bloomberg BusinessWeek writer Brad Stone called The Everything Store, reflects foresight, courage, vision, hard work and innovation that matches the story of any other major Internet or Information Age startup.

The company was started in a garage, although it stayed in the garage only for about three months. And it was not fresh, just-out-of-school whiz kids who started the company but a Wall Street veteran who decided that he, rather than the hedge fund company he worked for, should control his dream: to sell books over the Internet.

Bezos’ New York employer, a technology-driven hedge fund firm called D. E. Shaw, had already invested in several Internet ventures, and it would have been ready to finance an online retailer. But Stone describes how Bezos’ growing desire to strike out on his own was confirmed by his reading of the bestseller Remains of the Day — a brilliantly subtle but ultimately devastating novel of regret.

Much of the outline of the Amazon story is well-known, from its first focus on books and then a few other categories (e.g., movies and toys) to its current status as the behemoth of online retailing for just about any product, a giant in the e-reader space, and more recently, a major player in cloud computing with Amazon Web Services. Today, the company is headquartered in a campus of a dozen buildings and reached $61 billion in sales in 2012. Most people watched as new initiatives came online — Search Inside This Book, Super Saver Shipping and, more recently, Amazon Prime are three examples — and quickly became expected features. In fact, it is almost surprising to learn that Amazon is only 18 years old. The first book ordered on Amazon was Fluid Concepts and Creative Analogies by Douglas Hofstadter; the date was April 3, 1995. The buyer was a former colleague of Shel Kaphan, a founding employee of Amazon.

The Stories Behind the Story

Although the overall plot of the story might be well known, The Everything Store is filled with the unknown stories and the vital but often anonymous people who made the Amazon success possible. Kaphan is an example. A veteran programmer when he was hired, Kaphan, who Stone calls Amazon’s “primary technical steward,” was responsible for turning the dream into a functional reality. Promised that he could stay with the company for as long as he wanted, Kaphan lasted five years before, as described by Stone, he was made less than welcome by Bezos.

Bezos, of course, is the star of the story. The portrait offered by Stone is of a complex, driven, hands-on, creative entrepreneur, which is no less than expected. It seems that there is an archetype for the successful entrepreneur and one that seems to run counter to the generally accepted view that respectful, team-oriented leadership works best.

According to Stone, one mention of work-life balance in a job interview at Amazon during the early growth years would kill your chances. Bezos, however, has had some formidable sparring partners, including Barnes & Noble and the New York publishers, not to mention the challenge of a dot-com bust, all of which would have conquered a less confident — and visionary — opponent.

The Everything Store is a fascinating exploration of a unique company and its equally unique founder.

Who Needs an Office These Days?

REMOTE

Office Not Required

How am I going to know my employees are really working? Won’t those in the office be jealous? What if I need an answer now? These are just some of the excuses that opponents of remote work advance as they resist what Jason Fried and David Heinemeier Hansson argue is the most effective and promising way to manage people. Fried and Hansson should know: As co-founders of software company 37Signals, they have 36 partners spread around the world serving millions of users. In their new book, Remote, they clearly advance the advantages of a virtual workforce while forcefully responding to those who can’t let go of the traditional office.

Are They Really Working?

For many leaders and business owners afraid of remote work, the main objection is that workers will “slack off” if not supervised. According to the authors, this fear reveals a much bigger problem. Specifically, it reveals that the manager sees him- or herself as not much more than a babysitter – which does not portend well for the organization. To put it bluntly, if managers act like babysitters, employees will respond in kind, the authors write. “People have an amazing ability to live down to low expectations. If you run your ship with the conviction that everyone’s a slacker, your employees will put all their ingenuity into proving you right. If you view those who work under you as capable adults who will push themselves to excel even when you’re not breathing down their necks, they’ll delight you in return.”

In fact, as the authors argue in a later chapter, managing remote employees increases the focus of the employee’s performance on the actual work for which he or she is responsible. Performance measurement in traditional work environments can be diverted by factors that don’t involve the true productivity of the employee. Did the employee arrive at 9:00 or 9:30 a.m.? Is he wearing appropriate attire for the office? These are not the questions that managers of remote employees ask. Instead, they are focused on the employee’s work results: Did he finish the report on time? Is her sales team improving their closing ratios? Remote work doesn’t enable slacking off – you can’t disguise lack of productivity; but it does refocus the manager’s attention on what’s important.

Some Trade-offs

The authors aren’t starry-eyed zealots about remote work, nor are they academics examining the virtual workplace as a theoretical construct. They recognize the advantages and potential of remote work but also recognize that there can be some trade-offs. Sometimes it’s nice to talk to your manager in person or sit in a room with your colleagues brainstorming on the next big idea.

Discipline is a big commitment, more than you realize. And interruptions are going to happen – it’s hard to say no to your child showing you the “A” on his homework.

But with technology and the right management – for example, holding weekly virtual meetings where people can give an informal report on their week – the tradeoffs can be mitigated, and the full benefits of virtual work can be enjoyed by employees and organizations alike.

Of course, there will always be some bosses who steadfastly believe remote employees means total loss of control. In such cases, the employee looking for virtual work employment has but one choice: to look elsewhere. In the end, it’s the company that loses.